Day one of Eddie Obeid before ICAC

The former NSW Labor MP Eddie Obeid begins giving evidence before ICAC over his role in influencing a mate and ex-minister Ian McDonald in the issuing of coal exploration licences over land owned by the Obeid family in the state's Upper Hunter. The family gained a benefit of at least $75 million. Ian McDonald is due to give evidence on Thursday. Proceedings were notably testy, with Eddie Obeid threatened with contempt for failing to answer questions.

Transcript

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TIM PALMER: The former New South Wales Labor Party powerbroker, Eddie Obeid, was dealt a devastating blow late in his first day's evidence at a hearing into corruption allegations that his family reaped tens of millions of dollars from information provided by his political friend, the then minerals minister Ian MacDonald.

Appearing at the New South Wales Independent Commission Against Corruption, Mr Obeid denied under oath all morning that he'd any involvement in the deals. But by mid-afternoon the commission showed its hand and Mr Obeid was forced to listen to a telephone intercept. In it he openly discusses a transaction surrounding the sale of a coal exploration licence granted over the Obeid family land by Mr MacDonald.

It was a torrid day in the witness box for Mr Obeid. He was labelled a liar, threatened with contempt charges and warned that the ICAC is working towards finding that he engaged in 'a criminal conspiracy' with Ian MacDonald to defraud the people of New South Wales of hundreds of millions of dollars.

Peter Lloyd is covering the hearing for PM, and Peter joins me now. Peter, how was Edie Obeid's demeanour throughout the day?

PETER LLOYD: It was a tone of anger and almost contempt. It seems Eddie Obeid is a man not used to being quizzed and questioned about his judgement, and certainly about the role that he played in these subject transactions that stemmed from the decision by his political mate and friend, Ian MacDonald, the then minerals minister in New South Wales back in 2008.

And there are questions around the role played, not just by Mr Obeid but of course by his five business partners' sons. He angrily tried to separate himself from them today, in a sense saying that he was at arm's length from the family business while he was in politics.

TIM PALMER: That lasted all morning. How did that line finally come apart during the day?

PETER LLOYD: Well it was really a day that unravelled towards one point, which is the telephone intercept. It's between Greg Jones, a wheeler dealer from Sydney's Eastern Suburbs, he's also a mate of Ian MacDonalds, he rang in May 2011, Eddie Obeid, and was appealing on him to get involved in solving a dispute which centred around this: that the Obeid family sold their interest in the suspect mining leases to a coal company called Cascade Coal.

They gave the first $30 million they bought it for to the Obeids but the second was held up after the state election in New South Wales where Labor was thrown out. Cascade's directors clearly were in panic mode, they thought everything was going to go up against the wall on this one because they knew what was involved was of suspect origins. And the boys in the Obeid family were furious with Cascade because they hadn't antied up with the $30 million they wanted for the family trust fund. The phone call was from Jones to Obeid to appeal to the father of the boys to get involved with solving the problem.

So what it does is it points towards this: that he knew something more than what he says so far about the activities that stemmed from the lease that was granted by his mate. Now he's been saying that he knew nothing about what was going on.

TIM PALMER: So we have, as you say, a former kingmaker not used to being put in the box as things were precisely. How testy did things get that it ends up with him being suggested he might face contempt charges?

PETER LLOYD: There were - it was an extremely awkward moment where under some tight questioning from Geoffrey Watson SC, the chief counsel for ICAC, the inquisitor if you like, he was plugging away with questions - very specific questions - about what he had asked of his mate MacDonald. And Mr Obeid looked both the commissioner and he squarely in the face in turn and said 'I will not be intimidated by anyone'. To which he was warned later in the day by Justice Ipp, in a rather angry and testy exchange that he wasn't answering the questions and that if he didn't answer the questions he certainly would be facing contempt charges. Justice Ipp warned him that he wasn't in the bear pit of parliament in New South Wales he was in court and he needed to respect the process.

We also heard some rather testy exchanges from Stuart Littlemore representing Mr Obeid. He didn't like the line of questioning either from Mr Watson. He stood up and objected a number of times and was rebuked by Justice Ipp who said that he was behaving insolently. So it was testy times all round.

TIM PALMER: He didn't like the volume of questioning; raised voices in the hearing room?

PETER LLOYD: Littlemore doesn't like - Mr Littlemore doesn't like the tone of the questions, he doesn't - he argues about the verbs, the phrases, the adjectives, you name it. He's a very unhappy counsel at the moment.

TIM PALMER: Going back to this central relationship with Ian MacDonald, how does Eddie Obeid describe this mateship? What sort of a friendship is it?

PETER LLOYD: Yes there was a sort of a tangential tutorial about what happens in the art of politics in New South Wales and what is a mate and what's a friend and what's a politician. And Eddie Obeid is trying to build this distinction that, rather than just being a friend in the sort of conventional sense, Ian MacDonald from the left, he from the right, formed a political union if you like. A political union of convenience, and they were political friends. 'We went to dinner, we went to lunches, we spent time together. My boys were friends with him, I was a political friend.' And there is a subtle but distinct difference in what they're saying that means.